CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Platinum likely to continue outperformance as silver and gold flounder

Precious metals may have lost a bit of their shine of late, yet platinum provides the market leader as traders prepare for the grand 2021 reopening.

Platinum weakens amid wider precious metal decline

Platinum is on a rare down day today, with a wider pullback in precious metals driving weakness for this recent outperformer. The sector has been particularly interesting over the past year, with global monetary and fiscal expansion driving upside given the role as an inflation hedge. That driver of interest for the sector is unlikely to go away, with the ‘reflation trade’ expected to fully kick in this year.

The Covid-19 pandemic has been deflationary for the most part, yet this year could see that shift as major stimulus efforts are accompanied by a short rise in commodity (input) prices. The Federal Reserve (Fed) December forecast points towards a significant move back towards the 2% target rate over the course of this year, with many seeing that as a potential reason to get long precious metals.

Fortunately for some of these precious metals, we do not only see them through the lens of a haven or inflation play, with silver and palladium in particular gaining some traction from the wider surge in commodities.

Huge Chinese demand growth in 2020 is likely to continue through this year, with the reopening likely to ramp up that consumption driver for commodities. With that in mind, particular interest lies in the likes of platinum which is expected to benefit from a return to pre-pandemic levels of automotive, jewelry and industrial demand.

Platinum, gold and silver price technical analysis

The chart below highlights why were particularly interested in this asset, with the gold/platinum and silver/platinum both falling sharply over recent months. That platinum outperformance could continue as we move forward, with clear evidence that this is the favoured market of the three of late.

That leads us to the platinum chart itself, with the pullback seen today bringing a potential buying opportunity. The four-hour chart highlights the recent leg higher, with the price falling back into the 61.8% Fibonacci support level.

A break below the $1211 support level negates this current intraday trend, bringing a potential wider retracement of the rise from $1077. Until then, further upside looks likely for this precious metal outperformer.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Speculate on commodities

Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1

  • Wide range of popular and niche metals, energies and softs
  • Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
  • View continuous charting, backdated for up to five years

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.